Which states follow federal treatment of box 14 codes versus having unique withholding rules?
Executive summary
Box 14 on the W‑2 is a catchall “Other tax information” field that the IRS leaves largely nonstandardized, so many states and employers use it to report state‑specific withholdings or informational items—examples include state disability insurance (SDI) entries in California and New Jersey and NYSDI in New York—while other states simply mirror federal withholding treatment and rely on the standard W‑2 boxes; however, the sources reviewed do not provide a single authoritative list dividing every state into “follows federal treatment” versus “has unique Box 14 rules,” so a definitive state-by-state roster cannot be produced from the available reporting .
1. Why Box 14 is a patchwork, not a federal standard
The IRS frames Box 14 as optional “other tax information,” which employers may use to convey additional details that aren’t standardized elsewhere on the W‑2, meaning the entries and codes are highly variable and not governed by the same federal standardization as Boxes 1–13 . Because the IRS intentionally leaves Box 14 open-ended, employers and states have filled it with a range of items—state disability, local taxes, union dues, employer benefits codes—so whether an amount affects federal withholding or state withholding depends on the nature of the item and state law rather than a single federal rule [1].
2. Clear examples of states that use Box 14 for state‑specific withholdings
Reporting in Box 14 commonly reflects mandatory state programs: California employers often list CASDI (California SDI) and related paid‑family‑leave entries in Box 14, New Jersey shows SDI contributions similarly, and New York employers sometimes report NYSDI there—these are recurring examples in state‑focused tax guidance and W‑2 code lists . Payroll and tax guidance consistently warns that such Box 14 entries can affect state returns even if they do not change federal taxable wages, demonstrating how state rules diverge from federal treatment for particular programs .
3. States changing withholding rules for new leave and benefit programs
Several states have recently altered withholding and taxability rules tied to Paid Family and Medical Leave (PFML/FAMLI) or similar programs—Colorado, Massachusetts and Maine are specifically called out in a 2026 compliance roundup as having new PFML taxability or withholding guidance that affects how payroll and W‑2 reporting are handled . Those state changes illustrate that evolving state policy can create more items reported in Box 14 or new requirements that depart from federal withholding treatment—for example, whether leave benefits are subject to FICA or reported as wages is set by statute or agency guidance at the state level .
4. Where federal treatment typically controls — and the limits of the reporting
For core federal withholding elements (federal income tax, Social Security, Medicare), the W‑2 boxes and IRS withholding tables remain the controlling standard and are applied uniformly across employers; Box 14 generally does not change those federal calculations but serves as informational or state‑directed reporting . That said, sources emphasize that Box 14 entries “do not always” affect federal taxes but “can have implications for your state taxes,” meaning many states impose their own rules about whether a Box 14 entry triggers state withholding, deduction, or credit treatment .
5. Practical consequence and what reporting does not reveal
The available sources illustrate the fragmentation—examples and guidance for states like California, New Jersey, New York, and states updating PFML rules confirm divergence from a single federal approach—but none provide a comprehensive, authoritative roster of which states “follow federal treatment” versus maintain unique Box 14 withholding rules, so a definitive state-by-state binary cannot be declared from these reports alone; the prudent route is to consult specific state tax instructions or payroll guidance for each state to determine whether particular Box 14 codes affect state withholding or returns .